The indirect and direct methods of preparing the cash flow statement are identical EXCEPT for the
A) significant noncash activity section.
B) operating activities section.
C) investing activities section.
D) financing activities section.

Question

Quizplus · Accepted Answer

The indirect and direct methods differ only in the operating activities section, where the indirect method adjusts net income for changes in balance sheet accounts, while the direct method lists cash receipts and payments.

The Indirect and Direct Methods of Preparing the Cash Flow